- Bitcoin remains locked in a consolidation range after a sharp selloff, with $80,000 acting as critical support and the 50-day EMA near $95,000 as resistance.
- The market is weighing downside risk against a potential grind higher toward $100,000.
Bitcoin has rallied slightly during the trading session on Tuesday, but at this point in time, I think the thing you need to pay the most attention to is the fact that Bitcoin is in the midst of some type of consolidation range, all things being equal. This is a market that I do believe will probably continue to be quite noisy, as the massive selloff, of course, will attract a certain amount of attention and now probably put some type of fear into the market overall.
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At this juncture, I believe that the $80,000 level is your floor in the market. Anything below there really starts to put the crypto markets under stress because, as I'm sure you're aware, as goes Bitcoin, so goes the crypto market in general. In other words, if the Bitcoin market starts to fall apart, you're going to have a lot of trouble with other coins, especially some of the smaller coins.
On the other hand, if we do turn around and break above the 50-day EMA currently sitting just above the $95,000 level, then it gives Bitcoin a shot at redemption and rising to the $100,000 level. In that environment, you start to see a little bit of pushback against the massive selling that we had seen.
Bitcoin as an Institutional Risk Barometer
But keep in mind, it will be interesting, and it will be different this time, the way that Bitcoin recovered, assuming that it does, because this is now an institutional ETF more than anything else. Everybody got excited when Wall Street got involved in Bitcoin, and now they seem to be getting what it is they thought they wanted, and that is Bitcoin behaving like an ETF. It is literally measuring risk appetite at the moment.
What we need to see is everything go up, and that will have investors looking to jump into the Bitcoin market. Stay away from social media. I've seen more nonsense in the last three weeks dealing with this Bitcoin selloff than I can remember in 20 years of trading. At the end of the day, it's on the precipice of a bigger move. The question is, how long does it have to sit here and decide? If we break it down, we could be looking at $65,000. But if we go higher, then I think it's a gradual grind to the upside.
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